International Business Environment: Ford Motors Analysis and Report

This report provides a comprehensive analysis of the international business environment, exploring various business techniques used to analyze the global market, including PEST, PESTEL, SWOT, and Porter's Five Forces models. It examines the impact of globalization and international trade on national economies, highlighting benefits like foreign direct investment and technological innovation, while also addressing risks such as interdependence and equity distribution. The report further delves into the micro and macro environmental factors affecting Ford Motors, utilizing SWOT analysis to assess its strengths, weaknesses, opportunities, and threats. It also discusses the benefits, opportunities, and challenges of globalization and international trade specifically for Ford Motors. The report concludes with an examination of cultural and regulatory diversity in international markets, emphasizing the importance of corporate social responsibility and sustainability in supporting business success, and exploring potential conflicts between corporate strategy and ethical, social, and sustainable responsibilities.

INTERNATIONAL
BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Business techniques which is used to analyse international business environment....................1
Impact of globalisation and international trade on national economies......................................4
TASK 2............................................................................................................................................6
Micro and Macro environmental factors of Ford Motors company............................................6
Benefits, opportunities and challenges of globalisation and international trade for Ford Motors
.....................................................................................................................................................8
TASK 3............................................................................................................................................9
Cultural and regulatory diversity in international market...........................................................9
Importance of corporate social responsibilities and sustainability in supporting business
success.......................................................................................................................................11
Explanation of potential conflict between corporate strategy and ethical social and sustainable
responsibilities...........................................................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................15

INTRODUCTION
International business environment is considered as the business environment in which
business across the nation trade and communicate with each other in order to develop
commercial transaction between two or more regions. This report is about techniques of
international business environment used in organisation with impact of globalisation and
international trade on national economics. Macro and micro environment of organisation is also
to be discussed in this report. Benefits, opportunities and challenges of globalisation and
international trade is also to be discussed in this report. Further, in this report an analysis done on
cultural and regulatory diversity of businesses in international market. Potential conflicts
between corporate strategy and ethical social and sustainable responsibilities is also to be
analysed in this report.
TASK 1
Business techniques which is used to analyse international business environment
There are various methods which is used by organisation to measure international
business environment (Hamilton and Webster, 2018). International business environment is
considered as the macro view of organisation in business market across globally. This analysis
helps organisations to develop effective strategies which helps in running smooth business
operation of the organisation. There are six tools for measuring international business
environment analysis which are as follows-
PEST ANALYSIS
This is the technique which is used by organisation to measure political, economic, social and
technological factors of external environment. This analysis is done by organisation just to
measure overall effect of activities and performance of organisation. This method gives an
overview regarding micro environmental factors that taken by company into consideration.
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Political factor used to analysis degree of government intervene for organisation. In these
factors such as tax policy, labour law, environmental law, trade restrictions, traffics are included.
Economic factors include factors like interest rates, exchange rates, inflation rate etc. to develop
any decision for organisation, this factor considered as most important. Social factor will use to
analyse cultural and social aspects such as population, health, growth rate etc. technological
factor used to analyse technological aspects.
PESTEL analysis
This model is also considered as effective tool of business environment where factors like
internal and external is analysed. This tool used for situation analysis which measure macro
environmental factors (Nieri and Giuliani, 2018).
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Il
lustration 1: PEST analysis
( source: Tools for International Business
Environment Analysis, 2017)

Swot analysis
This is the model used to analyse internal business situation in which strength and weaknesses of
the company is measured. Strength is factor that give competitive advantage of organisation,
weaknesses measure harmful factors which are affecting business operations, opportunities
analyse situation which bring competitive advantage and threat measure unfavourable situation
of organisation.
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Illustration 2: PESTEL analysis
( source: Tools for International
Business Environment Analysis, 2017)
Illustration 3: swot analysis
( source: Tools for International Business
Environment Analysis, 2017)

PORTER'S FIVE FORCES MODEL
This model is also known as effective model which helps in determining competitive strategy
and profitability of organisation. This framework measures the factors which affect competition
and profitability of the business organisation. Therefore, according to this model there are five
key forces which affect industry.
These forces helps in determining structure of company and its level of competition in
business market. Therefore, factors are low barriers to enter, having few buyers and suppliers but
many substitute products and competitors will consider as competitive but not attractive. These
are the business tools which used by the organisation which has its business operations in across
the nations.
Impact of globalisation and international trade on national economies
In this current era, globalisation has impacted nearly every aspect of modern life.
Globalisation is considered as the effective tool which is benefit economies in around the world.
This globalisation has created large competition between the organisation who deals their
business globally. By globalisation, business operations of organisations are increased efficiently
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Illustration 4: PORTER'S FIVE FORCES
( source: Tools for International Business
Environment Analysis, 2017)

and which limit conflicts and spread wealth around the economies of countries. Diagram which
shows impact of globalisation towards economy and international investors are as follows-
Benefits of globalisation are as follows- Foreign direct investment: with globalisation, foreign direct investment has increases
with rapid growth in world trade. This increase in foreign direct investment helps in
boosting technology transfer easily across nations which overall helps in increases
growth of economy. Technological innovation: growth of globalisation, in foreign direct investment overall
helps in increasing competition in business world with use of new technologies in
organisation (Cao, Navare and Jin, 2018). Therefore, globalisation has contributed a lot
for the development of economy around the world.
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Illustration 5: impact of globalisation on economic growth
( source: The Impact Of Globalisation on Economic Growth, 2018)

 Economies of scale: globalisation, also helps multinational companies to realize
economies of scale which overall reduces cost and prices in the economy.
Risk which associate with globalisation: Interdependence: by globalisation, local economies of countries will get fluctuated. This
globalisation, provides negative impact on countries which relies on large countries of
market.
 Equity distribution: globalisation, generally provides benefits to rich nations and because
of this it creates greater inequalities and develop conflict in both national and
international economies of the market.
Impact of international trade-
International trade plays an important role in national economies. Every country has its
own capability of generating products. Therefore, national trade work as compensation for
countries which do not able to produce things which generated in some other countries.
International trade is a link which develops an availability of products in one another country
(Beck, 2018). For example: oil is the major resource which is the need for every country.
Therefore, some countries produced it and some import from that countries.
Its advantage is that international trade will create jobs and helps to boost economic
growth of the country. Companies who are involved in importing will develop more competitive
gains across the global trade. Efficient business operations are developed in companies with use
of trade.
Its disadvantage is that rich countries almost purchases all productivity with small
countries which create shortage of products in producing country. This also reduces jobs in
domestic industries because they will not able to compete with global scale.
TASK 2
Micro and Macro environmental factors of Ford Motors company
Micro environment of Ford Motors company
Ford Motors is the leading auto maker company who is known for innovative vehicle brand.
Therefore, company has continued to grow its revenue from several years (Ritzer and Dean,
2018). According to financial statistics, Ford has sold more than 6.6 million vehicles in 2017.
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Therefore, company is focusing to reduce cost and to reallocate their capital and resources to
market. Its swot analysis is as follows-
strength:
Brand image and equity
Ford has strong brand image because they are more involved in doing innovation towards
manufacturing of their commercial vehicles. Their more emphasis is on the product quality and
towards passenger safety.
Strong supply chain and manufacturing capabilities
This is also considered as their strength because they have strong supply chain and
manufacturing capabilities. It is estimated that this brand has almost 61 manufacturing facilities
across the globe.
Large product portfolio
Ford company has large product portfolio under which they produced trucks, luxury vehicles and
sport utility vehicles. This company also engage in providing financial services which through
Ford Motor Vehicles company LLC (Bojnec and Fertő, 2018).
Weaknesses:
product recalls
Company has frequent products recalls by which there are major chances of reducing its brand
image and its reputation. Ford has recall 5,50000 vehicles in 2018 which is due to gear shift
problem.
Higher cost compared to its competitors
Its cost prices are higher than its competitors which affect its profitability in business market.
Performance also affected of company because of their slower innovation process.
Opportunities:
growth through product development
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Company is involved in doing innovation which provides an opportunity to get growth of
company in business market. This opportunity helps them in satisfying customer needs and
expectations.
Threat-
new entry of high tech firms
There is threat for company regarding entry of new firm which is more innovated and
technologically developed. Through this its profitability get affected in business market.
Macro environment of Ford Motors company
political factor:
Government influence is there for company to support their innovation factors which enhancing
their business growth. This government influence provides them an opportunity for expanding its
business operation globally (Moon, 2018).
Economic factors:
In the economy of US market, company is achieving high rate of growth in business market.
Major profitability in earn by the developing market economies for Ford Motors which overall
reduces its profit margin. Therefore, company has to maximize its opportunities in foreign
market.
Social factor:
Ford Motors business operations are affecting with high prices of luxury products. Therefore,
company has to develop effective growth strategies under which they have to provide more
emphasize on innovation of the products.
Technological factors:
To ensure competitive advantage in business market, company have to increase its technological
factor by which company will achieve better growth. Company has effective mobile service
support which provides them opportunity to rise in market.
Benefits, opportunities and challenges of globalisation and international trade for Ford Motors
For Ford Motors globalisation proved as effective tool which provide overall growth of
company. Its benefit for company is as follows-
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With globalisation, Ford Motors will able to create job in industries. This also helps in
increase per capita income of the company in business market. Globalisation also helps in
increasing efficiency of business operation so that organisational objective easily get achieved.
opportunities of globalisation for Ford Motors
 Technological development- with the increase in globalisation, it proves to best for auto
makers company who are involved in manufacturing of commercial vehicles. This has
increased inflow of technologies in organisation. Therefore, technological diffusion
occurs with globalisation.
 Increase in capital- globalisation helps Ford Motor to increase their flow of capital as
well as outflow of capital. By foreign direct investment, overall capital of company
increases.
Challenges of globalisation for Ford Motors
There are many arguments created for globalisation and result appeared with that is long
termed feasibility of profit affected with globalisation. Therefore, for Ford Motors, globalisation
did not lead to ethical business practises for regulating business operation.
Benefits of international trade
International trade is the tool which effectively helps Ford Motors in exchanging their
products internationally. With the developing of international trade, company will able to
organise their business operation in across all the nations. It also helps company in increasing
their overall revenue and gets decreases competition from other business market. With their
diversified products company will able to manage their risk management.
Challenges of international trade
Major challenge which faced by Ford Motor company is distance in which difficulty
establish because of quick and close trade contacts between traders. They also sometimes faced
risk in transit where there are high chances of occurring damage to goods.
TASK 3
Cultural and regulatory diversity in international market
When companies operate their business operations at global level, there are many cultural
and regulatory diversity which they had to face. By this cultural and regulatory diversity,
performance and profitability of the business majorly affected. There are certain aspects which
affect international businesses.
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 Communication
Communication problem is first and foremost problem which faced by companies who operate
their businesses internationally. Different country has different language because of this it
becomes difficult for company to convey their business policies and messages to their
subsidiaries in another countries. In international market understanding importance of non-verbal
communication is most and equally important.
 Workplace etiquette
It is difficult for companies to deal with colleagues and business partners of different countries.
Every country has their own way of doing work and concept of punctuality also differ between
organisational culture of different countries (Platonova and et.al., 2018). Different workplaces
has different rules and regulations and also different working hours with different pay scale
which also diversify in business of international market.
 Organisational hierarchy
Different countries has different organisational hierarchy and also different attitude of
management roles is widely different in organisational culture. Because of this organisational
hierarchy different organisations work with different rules and regulations which creates
problems in organisation.
 Customs
This is also considered as the problem for doing international business where different country
has their own cultural difference in which basic customs, mannerisms and gestures are included.
This creates hurdle for customers in understanding business policies and products.
 Target audience
This is also the major problem for companies who are dealing their business operation globally.
To target their audience, companies have to do huge investment in advertising companion to
target audience. Huge investment required so that different culture of people across the nation
will able to understand company's overall products and services company's offering to them.
Importance of corporate social responsibilities and sustainability in supporting business success
To be covered in power point presentation
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Explanation of potential conflict between corporate strategy and ethical social and sustainable
responsibilities
This is the major point which shows that to maintain sustainability various conflicts has
been arises and faced by organisation. According to sustainable environment, company have to
develop their business operations in effective and in proper ethical way so that it does not harm
environment of society. Managing ethics is also put much focus where managers feels that ethics
is not influential in the workplace (Moon and Knudsen, 2018).
Sometimes, shareholders are also not get influenced for maintaining corporate social
responsibility because it requires a huge cost for doing investment for the well-being of society.
By developing effective ethical policies sometimes conflict also arises because there are many
people who are involved in developing business operation which sometimes create conflict.
Different views are sometimes not acceptable which also create conflict and effective ethical
policies will not operate for long term.
Sometimes, for development of society profit of organisation will get maximised which is
not accepted by shareholders and this overall result in conflict between shareholders and
organisations. Employees are also feels pressurised for the process of getting organisational
objectives which also result in conflict between employees and organisation. Transparency issue
is also get developed where to contribute in development of society, company needs high amount
of revenue by which transparency of work is not get developed in organisation.
For organisations, there is high demand for corporate disclosure which from stakeholders,
customers, suppliers, employees, communities, investors and activist which also create burden
for organisation in developing effective business operation. Ethical policies and corporate
strategies are also not accepted by employees when they feel that it will create mismanagement
and effective work will not get generated. This issue of employees are not sometimes acceptable
by top authorities which create conflict in organisation.
CONCLUSION
From the above study it can be concluded that business environment is the crucial factor
for every organisation who has business at global level. This report is about role of international
business environment for large organisation who has global business operations. In this report an
explanation is provided regarding business techniques which is used to measure international
business environment. Impact of globalisation and international trade on business operation is
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also explained in this report. Proper images are provided for better understanding of international
business environment. Further, in this report, micro and macro environmental factors of Ford
Motors is explained so that international business environment will easily understand. Benefits,
opportunities and challenges of globalisation and international trade is also discussed in this
report. Lastly, in this report importance of corporate social responsibly and conflict in
developing CSR is also explained. Therefore, it can be concluded that effective business
environment helps in achieving better profitability of organisation.
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REFERENCES
Books and Journals
Albuquerque, R., Koskinen, Y. and Zhang, C., 2018. Corporate social responsibility and firm
risk: Theory and empirical evidence. Management Science.
Beck, U., 2018. What is globalization?. John Wiley & Sons.
Bojnec, Š. and Fertő, I., 2018. Globalization and Outward Foreign Direct Investment. Emerging
Markets Finance and Trade. 54(1). pp.88-99.
Cao, L., Navare, J. and Jin, Z., 2018. Business model innovation: How the international retailers
rebuild their core business logic in a new host country. International Business
Review. 27(3). pp.543-562.
Dias, A and et.al., 2018. Corporate social responsibility disclosure in small and medium-sized
entities and large companies. Social Responsibility Journal.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Jamali, D. and Karam, C., 2018. Corporate social responsibility in developing countries as an
emerging field of study. International Journal of Management Reviews. 20(1). pp.32-61.
Moon, B.E., 2018. Dilemmas of international trade. Routledge.
Moon, J. and Knudsen, J.S., 2018, July. Corporate social responsibility and government.
In Academy of Management Proceedings (Vol. 2018, No. 1, p. 12777). Briarcliff Manor,
NY 10510: Academy of Management.
Nieri, F. and Giuliani, E., 2018. International Business and Corporate Wrongdoing: A Review
and Research Agenda. In Contemporary Issues in International Business (pp. 35-53).
Palgrave Macmillan, Cham.
Platonova, E and et.al., 2018. The impact of corporate social responsibility disclosure on
financial performance: Evidence from the GCC Islamic banking sector. Journal of Business
Ethics.151(2). pp.451-471.
Ritzer, G. and Dean, P., 2018. Globalization: the essentials. Wiley-Blackwell.
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Corporate Social Responsibility and Sustainable development. 2018. [ONLINE]. Available
through <http://www.rzdlog.com/about/cs_responsibility.php>
Kuepper, J., 2018. The Impact Of Globalisation On Economic Growth. [ONLINE]. Available
through <https://www.thebalance.com/globalization-and-its-impact-on-economic-growth-
1978843>
Tools for International Business Environment Analysis. 2017. [ONLINE]. Available through
<https://enterslice.com/learning/business-environment-analysis/>
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